This discussion paper puts forward a radical new vision for funding older people’s long-term care – one of the UK's biggest public policy challenges.

The future funding of long-term care for older people is widely recognised as one of the biggest public policy challenges confronting the UK Government. The cost of long-term care is set to increase in coming decades as a result of demographic change, increasing longevity, as well as the widely acknowledged need to spend more on care to raise quality.

Proposals for state-funded universal free care have thus far dominated debate, but are becoming increasingly problematic in light of the unprecedented transfers of wealth from younger to older cohorts that have occurred during a period of rising property prices.

This report sets out a new approach based around the model of a social insurance fund. The ‘National Care Fund’ proposed would have several key features:

* A risk-pool limited to older cohorts only.
* Auto-enrolment to achieve high levels of participation.
* Total flexibility for older people in when and how they pay their contribution, including the option to defer until after death in the form of a charge levied on their estate.
* Poorer individuals would have their contribution paid for by the state.
* A fully-fledged market in complementary long-term care insurance products from the private sector is also proposed.

Media coverage of this paper includes:
“Despite the baby boomers ageing, we can afford to care” by Polly Toynbee, The Guardian
“Got a few quid for the old rich folk?” by Alice Miles, The Times

Author: James Lloyd, Head of Policy & Research, ILC-UK

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